Employee theft is a constant concern. However, our current economic situation makes this situation even more pressing, especially as consumer debt is at an all-time high.
Our friends at Consolidated Insurance recently issued this valuable piece of information addressing how businesses should protect against employee theft. Below, you’ll find a summary of its important points. We encourage you to read the entire article here. Preventing Employee Theft-2
When is Employee Theft a Major Risk?
When times are tough, individuals struggle to make ends meet and debt piles up fast. If they have rent to pay and families to support, but they can’t afford basic necessities, this can make for a desperate situation. Theft becomes more attractive when it’s viewed as necessary and even justified.
The risk of employee theft may not be apparent to you in your workplace because you have faith in all of your employees. However, you don’t know what’s going on in their personal lives or what kind of pressures they’re facing. It’s important to understand that any employee who deals with company finances and payments poses a risk. The most responsible employee might resort to theft if they feel pressured financially. Additionally, employee theft doesn’t only involve cash; materials, tools and company time can all be stolen. One excellent way to protect your business and manage your risk level is to talk with Matt Urlock at Consolidated Insurance.
How to Prevent Employee Theft at Your Business
In order to stop employee theft before it occurs, take these crucial steps:
- Encourage open communication and talk to your employees about the state of the economy and your business.
- Make sure your employees understand what fraud is and make your no-tolerance policy abundantly clear.
- Complete cash deposits and the reconciliation of bank statements as soon as possible.
- Use a trusted payroll service.
- Invest in Embezzlement Insurance and Commercial Lines Insurance from Consolidated Insurance.
- Prioritize your employees by taking a decrease in pay or refusing your annual bonus. In an equalized workplace, workers feel less motivated to steal.
- Hire at least 2 employees to keep track of bookkeeping duties and ensure that all owners know how to spot signs of theft. Without a partner or someone to watch over them, an individual is more likely to steal.
- Consider creating an anonymous fraud hotline so other employees can report suspicious behavior if/when it occurs.
- Supervise your foremen and upper-level employees and inspect all of your job sites on a regular basis.
- During the hiring process, always perform thorough background checks.
- Maintain good financial and property records by performing audits and checks on a random basis.
- Give all foremen proper training so they know how to identify and report suspicious behavior.
We would add one piece of additional advice not in the article. It is extremely important to ensure that all your employees take a vacation. Very often, situations of embezzlement are caught when the offending employee is out on a vacation. During their vacation, be sure to stay vigilant. However, in order to prevent employee theft, it’s vital to stay on guard 24/7. This can happen to any business at any time.
James P. Randisi, President of Randisi & Associates, Inc., has since 1999 been helping employers protect their clients, workforce and reputation through implementation of employment screening and drug testing programs. This post does not constitute legal advice. Randisi & Associates, Inc. is not a law firm. Always contact competent employment legal counsel. To learn more about avoiding lax screening procedures, Mr. Randisi can be contacted by phone at 410.336.0287 or Email: info@randisiandassociates.com or the website at randisiandassociates.com
